Agreed-Upon Procedures Engagements

Agreed-Upon Procedures Engagements 2171

AT-C Section 215

(Supersedes SSAE No. 18 section 215)

Source: SSAE No. 19.

Effective for agreed-upon procedures reports dated on or after July

15, 2021. Early implementation is permitted.

Introduction

Scope of This Statement on Standards for

Attestation Engagements

.01 This section contains performance and reporting requirements and ap-

plication guidance for all agreed-upon procedures engagements. The require-

ments and guidance in this section supplement the requirements and guidance

in section 105, Concepts Common to All Attestation Engagements.

.02 An agreed-upon procedures engagement is an attestation engagement

in which a practitioner performs specic procedures on subject matter and re-

ports the ndings without providing an opinion or conclusion. The subject mat-

ter may be nancial or nonnancial information. Because the needs of an en-

gaging party may vary widely, the nature, timing, and extent of the procedures

may vary, as well. (Ref: par. .A1–.A2)

.03 Because the engaging party best understands its own needs,the engag-

ing party is required to agree to the procedures and acknowledge that the pro-

cedures performed are appropriate for the intended purpose of the engagement

prior to issuance of the practitioner's agreed-upon procedures report. Engage-

ment circumstances may be such that it is appropriate for parties in addition

to the engaging party to agree to the procedures and acknowledge that the pro-

cedures performed are appropriate for their purposes. The engaging party and

intended users assess for themselves the procedures and ndings reported by

the practitioner and draw their own conclusions from the work performed by

the practitioner.

.04 In an engagement performed in accordance with this section, the prac-

titioner does not perform an examination or a review engagement and does not

provide an opinion or conclusion. Instead, the agreed-upon procedures report

is in the form of procedures and ndings.

.05 When a practitioner performs services pursuant to an engagement to

apply agreed-upon procedures to subject matter as part of or in addition to

another form of service, this section applies only to those services described

herein; other professional standards would apply to the other services. Other

services may include an audit, review, or compilation of a nancial statement,

another attestation service performed pursuant to the attestation standards,

or a nonattest service. A practitioner's report on applying agreed-upon proce-

dures to subject matter may be combined with a report on such other services,

provided the types of services can be clearly distinguished, and the applicable

standards for each service are followed.

2172 Level of Service

.06 This section does not apply to engagements to issue letters (commonly

referred to as comfort letters) to underwriters and certain other requesting

parties.

Effective Date

.07 This section is effective for agreed-upon procedures reports dated on

or after July 15, 2021. Early implementation is permitted.

Objectives

.08 In conducting an agreed-upon procedures engagement, the objectives

of the practitioner are to do the following:

a. Apply specic procedures to subject matter (Ref: par. .A3)

b. Issue a written practitioner's report that describes the procedures

applied and the practitioner's ndings without providing an opin-

ionorconclusiononthesubjectmatter

c. Communicate further as required by relevant AT-C sections

Requirements

Conduct of an Agreed-Upon Procedures Engagement

.09 In performing an agreed-upon procedures engagement, the practi-

tioner should comply with this section, section 105, and any subject matter

section that is relevant to the engagement. A subject-matter section is relevant

to the engagement when it is in effect, and the circumstances addressed by the

section exist. (Ref: par. .A4)

Preconditions for an Agreed-Upon Procedures Engagement

.10 Section 105 indicates that a practitioner must be independent when

performing an attestation engagement in accordance with the attestation stan-

dards, unless the practitioner is required by law or regulation to accept the

engagement and report on the subject matter.

When the practitioner is not

independent but is required by law or regulation to accept an agreed-upon pro-

cedures engagement and report on the procedures performed and ndings ob-

tained, the practitioner's report should specically state that the practitioner

is not independent. The practitioner is neither required to provide, nor pre-

cluded from providing, the reasons for the lack of independence; however, if the

practitioner chooses to provide the reasons for the lack of independence, the

practitioner should include all the reasons therefor. (Ref: par. .A5)

.11 In order to establish that the preconditions for an agreed-upon pro-

cedures engagement are present, the practitioner should determine that the

following conditions, in addition to the preconditions identied in section 105,

are present:

(Ref: par. .A6–.A7)

a. The practitioner determines that procedures can be designed, per-

formed, and reported on in accordance with this section.

See AU-C section 920, Letters for Underwriters and Certain Other Requesting Parties.

Paragraph .24 of section 105, Concepts Common to All Attestation Engagements.

Paragraphs .24–.28 of section 105.

Agreed-Upon Procedures Engagements 2173

b. The engaging party agrees, or will be able to agree, to the proce-

dures and acknowledges that the procedures are appropriate for

the intended purpose of the engagement. (Ref: par. .A8)

c. The procedures to be applied to the subject matter are expected

to result in reasonably consistent ndings.

d. When applicable, the practitioner agrees to apply a threshold for

reporting exceptions established by the engaging party. (Ref: par.

.A36)

.12 The practitioner should establish an understanding with the engaging

party regarding the nature of the engagement, including the following:

a. The intended purpose of the engagement and the intended users

of the agreed-upon procedures report

b. Whether the practitioner's agreed-upon procedures report is ex-

pected to be restricted to the use of specied parties (Ref: par.

.A8–.A10)

c. Whether the engagement to be performed is pursuant to any law,

regulation, or contract (Ref: par. .A11)

d. Whether parties in addition to the engaging party will be re-

quested to agree to the procedures and acknowledge that the pro-

cedures performed are appropriate for their purposes (Ref: par.

.A12–.A15)

.13 The practitioner is precluded from accepting an agreed-upon proce-

dures engagement if the practitioner believes the intended purpose of the en-

gagement is not clear or the engaging party will not have a basis for agreeing

and acknowledging that the procedures are appropriate for the intended pur-

pose of the engagement.

Agreeing on the Terms of the Engagement

.14 The practitioner should agree upon the terms of the engagement with

the engaging party. The agreed-upon terms of the engagement should be speci-

ed in sufcient detail in an engagement letter or other suitable form of written

agreement. (Ref: par. .A16)

.15 The agreed-upon terms of the engagement should include the follow-

ing:

a. The nature of the engagement established pursuant to paragraph

.12

b. Identication of the subject matter and the responsible party

c. The responsibilities of the practitioner (Ref: par. .A17–.A18)

d. A statement that the engagement will be conducted in accordance

with attestation standards established by the AICPA

e. A statement that the responsible party is responsible for the sub-

ject matter (Ref: par. .A19)

f. A statement that the engaging party agrees to provide the practi-

tioner, prior to the completion of the engagement, with a written

agreement and acknowledgment that the procedures performed

are appropriate for the intended purpose of the engagement. (Ref:

par. .A20)

g. A statement that the engaging party agrees to provide, at the con-

clusion of the engagement, a representation letter.

2174 Level of Service

h. If known at the onset of the engagement, an identication of any

other parties, in addition to the engaging party, that will be re-

quested to agree to the procedures and acknowledge that the pro-

cedures performed are appropriate for their purposes. If the re-

quest is expected to be made by the engaging party, a statement

that the engaging party agrees to provide, at the conclusion of the

engagement, a written representation that the engaging party

has obtained from all necessary other parties agreement to the

procedures and acknowledgment that the procedures performed

are appropriate for their purposes.

i. If the engaging party is not the responsible party, a statement that

written representations may be requested from the responsible

party.

j. Reference to the expected form and content of the practitioner's

agreed-upon procedures report, including any use restrictions, if

applicable.

k. Disclaimers expected to be included in the practitioner's report, if

applicable

l. Assistance to be provided to the practitioner, if applicable

m. Involvement of a practitioner's external specialist, if applicable

n. Specied thresholds for reporting exceptions, if applicable (Ref:

par. .A37)

Procedures to Be Performed

.16 The practitioner should perform procedures agreed to and acknowl-

edged by the engaging party to meet the intended purpose of the engagement

established with the engaging party pursuant to paragraph .12a. (Ref: par.

.A21–.A26).

.17 The practitioner should not perform procedures that are open to vary-

ing interpretations or that use vague or ambiguous language. Terms of uncer-

tain meaning (such as general review, limited review, check,ortest) should not

be used in describing the procedures unless such terms are dened within the

procedures. (Ref: par. .A27)

.18 The practitioner should obtain evidence from applying the procedures

to provide a reasonable basis for the nding or ndings expressed in the prac-

titioner's report but need not perform additional procedures outside the scope

of the engagement to gather additional evidence.

Using the Work of a Practitioner’s E xternal Specialist

.19 The practitioner and the engaging party should explicitly agree to the

involvement of a practitioner's external specialist if assisting a practitioner in

the performance of an agreed-upon procedures engagement. (Ref: par. .A28–

.A30)

.20 The practitioner's report should describe the nature of the assistance

provided by the practitioner's external specialist.

Using the Work of Internal Auditors or Other Practitioners

.21 The procedures to be enumerated or referred to in the practitioner's

report should be performed by the engagement team or other practitioners and

not by internal auditors. (Ref: par. .A31–.A33)

Agreed-Upon Procedures Engagements 2175

Appropriateness of the Procedures Performed

.22 Prior to the issuance of the practitioner's agreed-upon procedures re-

port, the practitioner should obtain a written agreement of the procedures and

acknowledgment from the engaging party that the procedures performed are

appropriate for the intended purpose of the engagement. (Ref: par. .A34–.A35)

.23 If the engaging party refuses to provide the written agreement and

acknowledgment required by paragraph .22, the practitioner should withdraw

from the engagement.

Findings

.24 A practitioner should present the results of applying procedures to spe-

cic subject matter in the form of ndings. (Ref: par. .A36)

.25 The practitioner should report all ndings from application of the pro-

cedures. If the engaging party has established a threshold for reporting ex-

ceptions, the practitioner should describe such threshold in the practitioner's

report. (Ref: par. .A25, .A37, and .A47)

.26 When reporting ndings, the practitioner should not (Ref: par. .A41–

.A42)

a. use vague or ambiguous language. (Ref: par. .A38)

b. include terms of uncertain meaning. (Ref: par. .A39)

c. express an opinion or conclusion on the subject matter or about

whether the subject matter is in accordance with (or based on) the

criteria. (Ref: par. .A40)

Written Representations

.27 The practitioner should request from the engaging party written rep-

resentations in the form of a letter addressed to the practitioner. The represen-

tations should include the following: (Ref: par. .A35 and .A43)

a. A statement that the responsible party is responsible for the sub-

ject matter

b. If applicable, a statement that the engaging party has obtained

from all necessary parties agreement to the procedures and ac-

knowledgment that the procedures are appropriate for their pur-

poses

c. A statement that it has provided the practitioner with all relevant

information and access, as applicable, as agreed upon in the terms

of the engagement

d. A statement that all known matters contradicting the subject

matter and any communication from regulatory agencies or oth-

ers affecting the subject matter have been disclosed to the prac-

titioner, including communications received between the end of

the period addressed by the subject matter and the date of the

practitioner's report

e. A statement that it is not aware of any material misstatements

in the subject matter

f. A statement that it has disclosed to the practitioner all known

events subsequent to the period (or point in time) of the subject

matter being reported on that would have a material effect on the

subject matter

2176 Level of Service

g. Any additional representations that the practitioner determines

are appropriate

.28 When the engaging party is not the responsible party, the practitioner

should consider requesting the relevant written representations pursuant to

paragraph .27 from the responsible party in the form of a letter addressed to

the practitioner.

.29 The date of the written representations should be as of the date of the

practitioner's report. The written representations should address the subject

matter and periods covered by the practitioner's ndings.

Requested Written Representations Not Provided or Not Reliable

.30 When one or more of the written representations that the practitioner

has requested pursuant to paragraphs .27–.28 are not provided, or the practi-

tioner concludes that there is sufcient doubt about the competence, integrity,

ethical values, or diligence of those providing the written representations, or

the practitioner concludes that the written representations are otherwise not

reliable, the practitioner should do the following: (Ref: par. .A44)

a. Discuss the matter with the engaging or responsible party, as ap-

propriate

b. Reevaluate the integrity of those from whom the representations

were requested or received and evaluate the effect that this may

have on the reliability of representations and evidence in general

c. If any of the matters are not resolved to the practitioner's satisfac-

tion, take appropriate action, including determining the possible

effect on the practitioner's agreed-upon procedures report (Ref:

par. .A45)

Preparing the Practitioner’s Report

.31 The practitioner's report should be in writing. (Ref: par. .A46)

.32 The practitioner's report should be in the form of procedures and

ndings.

.33 If, as a result of performing procedures, the practitioner determines

that the description of the procedures performed or the corresponding nd-

ings, in the practitioner's professional judgment, are misleading in the circum-

stances of the engagement, the practitioner should discuss the matter with the

engaging party and take appropriate action. (Ref: par. .A47–.A48)

Content of the Practitioner’s Agreed-Upon Procedures Report

.34 The practitioner's agreed-upon procedures report should include the

following:

a. A title that includes the word independent to clearly indicate that

it is the report of an independent accountant. (Ref: par. .A49)

b. An appropriate addressee as required by the circumstances of the

engagement.

c. Identication of the engaging party.

d. Identication of the subject matter to which the procedures have

been applied. (Ref: par. .A50–.A51)

e. Identication of the responsible party, including a statement that

the responsible party is responsible for the subject matter. When

Agreed-Upon Procedures Engagements 2177

the engaging party is not the responsible party and identication

of the responsible party and its responsibility for the subject mat-

ter is based solely on representations received from the engaging

party, the practitioner's agreed-upon procedures report should in-

clude a statement to that effect. (Ref: par. .A52)

f. A statement that the engaging party acknowledged that the pro-

cedures performed are appropriate to meet the intended purpose

of the engagement. (Ref: par. .A53–.A54)

g. An identication of the intended purpose of the engagement in

sufcient detail to enable the user to understand the nature of

the work performed. (Ref: par. .A55)

h. A statement that the practitioner's report may not be suitable for

any other purpose. (Ref: par. .A56)

i. A statement that the procedures performed may not address all

the items of interest to a user of the report and may not meet the

needs of all users of the report and, as such, users are responsible

for determining whether the procedures performed are appropri-

ate for their purposes.

j. A statement that an agreed-upon procedures engagement in-

volves the practitioner performing specic procedures that the

engaging party has agreed to and acknowledged to be appropri-

ate for the intended purpose of the engagement and reporting on

ndings based on the procedures performed.

k. A description of the procedures performed detailing the nature

and extent, and if applicable, the timing, of each procedure.

l. A description of the ndings from each procedure performed, in-

cluding sufcient details on exceptions found.

m. If applicable, a description of any specied threshold established

by the engaging party for reporting exceptions.

n. A statement that the agreed-upon procedures engagement was

conducted in accordance with attestation standards established

by the AICPA.

o. A statement that the practitioner was not engaged to and did not

conduct an examination or review, the objective of which would

be the expression of an opinion or conclusion, respectively, on the

subject matter. (Ref: par. .A57)

p. A statement that the practitioner does not express such an opin-

ion or conclusion.

q. A statement that had the practitioner performed additional pro-

cedures, other matters might have come to the practitioner's at-

tention that would have been reported.

r. A statement that the practitioner is required to be independent of

the responsible party and to meet the practitioner's other ethical

responsibilities, in accordance with the relevant ethical require-

ments relating to the agreed-upon procedures engagement. (Ref:

par. .A58–.A59)

s. If applicable, a description of the nature of the assistance provided

by a practitioner's external specialist, as discussed in paragraphs

.19–.20.

t. When applicable, reservations or restrictions concerning proce-

dures or ndings. (Ref: par. .A60)

2178 Level of Service

u. The manual or printed signature of the practitioner's rm. (Ref:

par. .A61–.A63)

v. The city and state where the practitioner's report is issued. (Ref:

par. .A64)

w. The date of the report. The practitioner's report should be dated

no earlier than the date on which the practitioner completed the

procedures and determined the ndings, including that

i. the attestation documentation has been reviewed, and

ii. if applicable, the written presentation of the subject mat-

ter has been prepared.

Alert That Restricts the Use of the Practitioner’s Agreed-Upon

Procedures Report

.35 The practitioner should consider whether to include an alert, in a sep-

arate paragraph, that restricts the use of the practitioner's agreed-upon proce-

dures report, taking into account the understanding with the engaging party

regarding the nature of the engagement pursuant to paragraph .12a. (Ref: par.

.A7 and .A65–.A69)

.36 The alert should

a. state that the practitioner's report is intended solely for the infor-

mation and use of the specied parties.

b. identify the specied parties for whom use is intended. (Ref: par.

.A70)

c. state that the report is not intended to be, and should not be, used

by anyone other than the specied parties.

Adding Other Speciﬁed Parties After the Release of

the Practitioner’s Report

.37 When the practitioner issues a report that includes an alert restricting

the use of the practitioner's report to certain specied parties, and the engag-

ing party subsequently requests the practitioner to add an additional specied

party, the practitioner should determine whether to add the additional specied

party. As part of this determination, the practitioner should consider whether

(Ref: par. .A71)

a. the additional specied party has acknowledged or will be re-

quested to acknowledge that the procedures performed are ap-

propriate for their purposes. If the practitioner determines that

the acknowledgment is necessary, the practitioner should either

obtain such acknowledgment directly from the additional spec-

ied party or obtain a representation from the engaging party

that the additional specied party has agreed to the procedures

and acknowledged that the procedures performed are appropriate

for their purposes, and

b. the report will be reissued to identify the additional specied

party.

.38 If the practitioner provides a written acknowledgment to the engaging

party and the additional party that such party has been added as a specied

party, the practitioner should state in the acknowledgment that no procedures

were performed subsequent to the original date of the practitioner's agreed-

upon procedures report.

Agreed-Upon Procedures Engagements 2179

Restrictions on the Performance of Procedures

.39 When circumstances impose restrictions on the performance of the pro-

cedures, the practitioner should discuss with the engaging party whether those

restrictions are appropriate and, if the restrictions are appropriate, describe the

restrictions in the practitioner's report.

Knowledge of Matters Outside Procedures

.40 Although the practitioner need not perform procedures beyond the pro-

cedures agreed to and acknowledged by the engaging party to be appropriate

for the intended purpose of the engagement, if in connection with the applica-

tion of the procedures, and through the completion of the engagement, matters

come to the practitioner's attention by other means that signicantly contra-

dict the subject matter referred to in the practitioner's report, the practitioner

should discuss the matter with the engaging party and take appropriate ac-

tion, including determining whether the practitioner's report should be revised

to disclose the matter. (Ref: par. .A72–.A73)

Communication Responsibilities

.41 In the event the practitioner encounters known or suspected fraud or

noncompliance with laws or regulations in connection with the engagement,

the practitioner should consider responsibilities under the AICPA Code of Pro-

fessional Conduct and applicable law prior to communicating such information

either to the responsible party or the engaging party. (Ref: par. .A74)

Documentation

.42 The practitioner should prepare engagement documentation on a

timely basis that includes the following: (Ref: par. .A75–.A76)

a. The written agreement and acknowledgment from the engaging

party regarding the appropriateness of the procedures performed

for the intended purpose of the engagement, as required by para-

graph .22

b. The nature, timing, and extent of the procedures performed to

comply with relevant sections and applicable legal and regulatory

requirements, including the following:

i. The identifying characteristics of the specic items or mat-

ters tested

ii. Who performed the engagement work and the date such

work was completed

iii. When the appropriate party will not provide one or more

of the requested written representations pursuant to para-

graphs .27–.28 or the practitioner concludes that there is

sufcient doubt about the competence, integrity, ethical

values, or diligence of those providing the written repre-

sentations, or that the written representations are other-

wise not reliable, the matters in paragraph .30a–c

iv. Who reviewed the engagement work performed and the

date and extent of such review

c. The results of the procedures performed and the evidence ob-

tained

2180 Level of Service

Application and Other Explanatory Material

Scope of This Statement on Standards for Attestation

Engagements (Ref: par. .02)

.A1 Reference to "subject matter" in this section encompasses anything

on which agreed-upon procedures are performed, including information, docu-

ments, measurements, or compliance with laws and regulations.

.A2 The procedures to be performed may be developed by the practitioner,

the engaging party, another party, or a combination of these parties. Further,

the procedures may be prescribed by law, regulation, or contract.

Objectives (Ref: par. .08a)

.A3 In an agreed-upon procedures engagement, the practitioner applies

procedures to the subject matter of the engagement. The requirements and

guidance related to the subject matter in section 105 apply.

Conduct of an Agreed-Upon Procedures Engagement

(Ref: par. .09)

.A4 If a practitioner were performing an agreed-upon procedures engage-

ment related to an entity's compliance with requirements of specied laws, reg-

ulations, rules, contracts, or grants, section 105, this section, and section 315,

Compliance Attestation, would be relevant. In addition, there may be inter-

pretative publications applicable to the subject matter, such as, for example,

AICPA Statement of Position 17-1, Performing Agreed-Upon Procedures Re-

lated to Rated Exchange Act Asset-Backed Securities Third-Party Due Diligence

Services as Dened by SEC Release No. 34-72936.

Preconditions for an Agreed-Upon Procedures Engagement

(Ref: par. .10–.11 and .35)

.A5 The "Agreed-Upon Procedure Engagements Performed in Accordance

With Statements on Standards for Attestation Engagements" interpretation

(ET sec. 1.297.020) of the "Independence Rule" (ET sec. 1.200.001) establishes

independence requirements unique to agreed-upon procedures engagements.

.A6 In determining whether procedures can be designed, performed, and

reported on in accordance with this section, the practitioner may consider

whether such procedures

•

are or will be subjective or require judgment to apply,

•

will be selected to result only in ndings that show the subject

matter in a favorable light, and

•

will meet the intended purpose of the engagement.

.A7 In determining whether procedures can be designed, performed, and

reported on in accordance with this section, the practitioner may need to obtain

an understanding of the criteria or measurement framework used in developing

the subject matter.

.A8 The intended purpose of the engagement is determined by the engag-

ing party. Consideration of the intended purpose of the engagement and the

intended users of the practitioner's agreed-upon procedures report informs the

Agreed-Upon Procedures Engagements 2181

practitioner's professional judgment about whether it is practical or necessary

to obtain the agreement of those intended users and whether to restrict the use

of the report as discussed in paragraphs .35–.36.

.A9 The engagement may be required by law, regulation, or contract or may

arise as a result of a request by a third party or the engaging party's intent to

provide information to a broad class of users, such as customers.

.A10 The restriction to specied parties may or may not include parties

that have agreed to the procedures and acknowledged that the procedures per-

formed are appropriate for their purposes.

.A11 Law or regulation may require an agreed-upon procedures engage-

ment to be performed (for example, to demonstrate compliance with require-

ments of specic laws or regulations). Further, the procedures to be performed

may be prescribed by law, regulation, or contract. Regulatory expectations may

also be set out as part of a regulatory audit or communications or requests from

regulators. Law or regulation may prescribe the nature, timing, and extent of

the procedures to be performed and, in some cases, the way the procedures or

ndings are to be described in the practitioner's report. In other circumstances,

law or regulation may prescribe only the nature of the procedures to be per-

formed or may use terms that are unclear about whether an agreed-upon pro-

cedures engagement is an acceptable service (for example, terms requiring an

audit, review, examination, validation, or certication).

.A12 Based on the practitioner's understanding with the engaging party,

the practitioner may consider it necessary to request a regulator to agree to the

procedures and acknowledge that the procedures performed are appropriate for

their purposes.

.A13 A contract may require an agreed-upon procedures engagement to be

performed. Given that the procedures are being performed to satisfy the obli-

gations or expectations of the parties to the contract, unless the procedures, or

a detailed description of the nature of the procedures, are included in the con-

tract, all users of the practitioner's agreed-upon procedures report ordinarily

would agree to the procedures and acknowledge that the procedures performed

are appropriate for their purposes.

.A14 For example, a practitioner may be engaged to perform procedures

relating to a securitization transaction. In such circumstances, the practitioner

and engaging party may identify other parties, such as underwriters, to request

to agree to the procedures and acknowledge that the procedures performed are

appropriate for their purposes.

.A15 Nothing precludes the practitioner and engaging party from agree-

ing to the type of communication or acknowledgment to be used to obtain the

agreement and acknowledgment of parties other than the engaging party that

the procedures performed are appropriate for their purposes and who would

make the communication. If the practitioner intends to communicate directly

with a party other than the engaging party, the rules regarding condential

information as set forth in the AICPA Code of Professional Conduct apply.

Agreeing on the Terms of the Engagement (Ref: par. .14–.15)

.A16 It is in the interests of both the engaging party and the practitioner to

document the agreed-upon terms of the engagement before the commencement

of the engagement to help avoid misunderstandings. The form and content of

the engagement letter or other suitable form of written agreement will vary

with the engagement circumstances.

2182 Level of Service

.A17 The responsibility of the practitioner is to carry out the procedures

and report the ndings in accordance with the attestation standards. The prac-

titioner assumes the risk that misapplication of the procedures may result in

inappropriate ndings being reported. Furthermore, the practitioner assumes

the risk that appropriate ndings may not be reported or may be reported in-

accurately. The practitioner's risks can be reduced through adequate planning

and supervision and due professional care in performing the procedures, accu-

mulating the ndings, and preparing the practitioner's report.

.A18 The practitioner has no responsibility to determine the differences

between the procedures to be performed and the procedures that the practi-

tioner would have determined to be necessary had the practitioner been en-

gaged to perform another form of attestation engagement. The procedures that

the practitioner performs pursuant to an agreed-upon procedures engagement

may be more or less extensive than the procedures that the practitioner would

determine to be necessary had the practitioner been engaged to perform an-

other form of engagement.

.A19 There may be circumstances in which the party responsible for the

subject matter is not a party to the engagement. For example, the practitioner

may be engaged to perform procedures with respect to benchmarking certain

information in which multiple entities may be responsible for certain aspects of

the information, or the information may be publicly available, such as subject

matter that appears on the internet or in a public building, such as a grocery or

retail store. If the practitioner is engaged to benchmark the prices of 10 prod-

ucts at 3 different stores on a certain date, each of the stores may be responsi-

ble for the source of the subject matter and the price that is published on the

shelf.

.A20 If the procedures are prescribed or otherwise developed by parties

other than the practitioner, the agreed-upon terms of the engagement may in-

clude the procedures to be performed.

Procedures to Be Performed (Ref: par. .16–.17 and .25)

.A21 Mere reading of specied information about the subject matter does

not constitute a procedure sufcient to permit a practitioner to report on the

results of applying procedures.

.A22 Examples of appropriate procedures include the following:

•

Inspection of specied documents evidencing certain types of

transactions or detailed attributes thereof

•

Conrmation of specic information with third parties

•

Comparison of documents, schedules, or analyses with certain

specied attributes

•

Performance of specic procedures on work performed by others

•

Performance of mathematical computations

.A23 Examples of inappropriate procedures include the following:

•

Mere reading of the work performed by others solely to describe

their ndings

•

Evaluating the competency or objectivity of another party

•

Obtaining an understanding about a particular subject

Agreed-Upon Procedures Engagements 2183

•

Interpreting documents outside the scope of the practitioner's pro-

fessional expertise

.A24 If the practitioner selects a sample, stating the size of the sample and

how the sample was selected contributes to the specicity of the description

of procedures performed (for example, 50 items starting at the 8th item and

selecting every 15th item thereafter or invoices issued from May 1 to July 31,

20XX).

.A25 In certain circumstances, it may be appropriate for a planned pro-

cedure to be modied because the results of applying the procedure indicate

that the procedure was not appropriately designed, and the ndings would be

inconsistent with the intended purpose of the engagement. However, any revi-

sions to the descriptions of procedures performed or ndings that are intended

to mislead users would be inappropriate.

.A26 Examples of other information the practitioner may include are the

date the procedure was performed and the sources of information used in per-

forming the procedure.

.A27 To avoid vague or ambiguous language, the procedures to be per-

formed are characterized by the action to be taken at a level of specicity suf-

cient for a reader to understand the nature and extent of the procedures per-

formed. Examples of descriptions of acceptable actions are as follows:

•

Inspect

•

Conrm

•

Compare

•

Agree

•

Trace

•

Inquire

•

Recalculate

•

Observe

•

Mathematically check

Conversely, the following descriptions of actions (unless dened to indicate the

nature, timing, and extent of the procedures associated with these actions) gen-

erally are not acceptable because they are not sufciently precise or have an

uncertain meaning:

•

Note

•

Review

•

General review

•

Limited review

•

Evaluate

•

Analyze

•

Check

•

Test

•

Interpret

•

Verify

•

Examine

2184 Level of Service

Using the Work of a Practitioner’s E xternal Specialist

(Ref: par. .19)

.A28 The practitioner's education and experience enable the practitioner

to be knowledgeable about business matters in general, but the practitioner is

not expected to have the expertise of a person trained for or qualied to engage

in the practice of another profession or occupation. In certain circumstances, it

may be appropriate to involve a practitioner's external specialist to assist the

practitioner in the performance of one or more procedures. The following are

examples of such circumstances:

•

An attorney who helps with the interpretation of legal terminol-

ogy in laws, regulations, rules, contracts, or grants

•

A medical specialist who assists with understanding the charac-

teristics of diagnosis codes documented in patient medical records

•

An environmental engineer who assists with the interpretation of

environmental remedial action regulatory directives that may af-

fect the procedures applied to an environmental liabilities account

in a nancial statement

•

A geologist who helps distinguish between the physical character-

istics of a generic minerals group related to information to which

the procedures are applied

.A29 The agreement regarding the involvement of a practitioner's external

specialist may be reached when agreeing upon the terms of the engagement or

as part of obtaining the engaging party's agreement to the procedures and ac-

knowledgment that the procedures performed are appropriate for the intended

purpose of the engagement.

.A30 A practitioner may apply procedures to the report or work product

of a practitioner's external specialist that does not constitute assistance by the

external specialist to the practitioner in an agreed-upon procedures engage-

ment. For example, the practitioner may reference information contained in a

report of a practitioner's external specialist in describing a procedure. However,

it is inappropriate for the practitioner to merely read the external specialist's

report solely to describe or repeat the ndings or to take responsibility for all

or a portion of any procedures performed by a practitioner's external specialist

or the external specialist's work product.

Using the Work of Internal Auditors or Other Practitioners

(Ref: par. .21)

.A31 Internal auditors may prepare schedules and accumulate data or pro-

vide other information for the practitioner's use in performing the procedures.

Also, internal auditors may perform and report separately on procedures that

they have carried out. Such procedures may be similar to those that a practi-

tioner may perform under this section.

.A32 A practitioner may perform procedures on information documented

in the working papers of internal auditors. For example, the practitioner may

do the following:

•

Repeat all or some of the procedures

•

Determine whether the internal auditors' documentation indi-

cates procedures performed and whether the ndings documented

are presented in a report by the internal auditors

Agreed-Upon Procedures Engagements 2185

.A33 It is inappropriate for the practitioner to do the following:

•

Merely read the internal auditors' report solely to describe or re-

peat their ndings

•

Take responsibility for all or a portion of any procedures per-

formed by internal auditors by reporting those ndings as the

practitioner's own

•

Report in any manner that implies shared responsibility for the

procedures with the internal auditors

Appropriateness of the Procedures Performed

(Ref: par. .22 and .27)

.A34 The practitioner's communication with the engaging party enables

the engaging party, if not already aware, to be made aware of the specic pro-

cedures performed and affords the engaging party an opportunity to suggest

alternative or additional procedures that the engaging party may feel are ap-

propriate in order to meet the intended purpose of the engagement.

.A35 The written agreement of the procedures and acknowledgment that

the procedures performed are appropriate for the intended purpose of the en-

gagement may be documented in the engagement letter, an addendum to the

engagement letter, a representation letter, or some other form of written com-

munication.

Findings (Ref: par. .11d,.15n, and .24–.26)

.A36 Findings are the factual results of procedures performed. Findings

are capable of being objectively veried and objectively described, which means

that procedures to be applied to the subject matter are expected to result in

reasonably consistent ndings. Accordingly, ndings exclude opinions or con-

clusions in any form as well as any recommendations that the practitioner may

make.

.A37 A threshold for reporting exceptions does not apply to ndings re-

ported in an agreed-upon procedures engagement unless such threshold is

established by the engaging party. An example of language that describes a

threshold for reporting exceptions is as follows: "For purposes of performing

these procedures, no exceptions were reported for differences of $1,000 or less

resulting solely from the rounding of amounts disclosed."

.A38 To avoid vague or ambiguous language, the ndings are described at

a level of specicity sufcient for a user to understand the nature, timing, and

extent of the procedures and ndings.

.A39 If, in the practitioner's judgment, certain terms are potentially un-

certain in meaning, the practitioner may consider whether a glossary is appro-

priate in the circumstances.

.A40 An example of language that should not be used in reporting ndings

is as follows:

Nothing came to our attention that caused us to believe that the subject matter

is not in accordance with (or based on) the criteria, in all material respects.

.A41 The following table provides examples of appropriate and inap-

propriate descriptions of ndings resulting from the application of certain

procedures.

2186 Level of Service

Appropriate

Procedures

Appropriate

Description of

Findings

Inappropriate

Description of

Findings

Inspect the shipment

dates for a sample

(agreed-upon) of

specied shipping

documents and

determine whether any

such dates were

subsequent to [date].

No shipment dates

shown on the sample of

shipping documents

were subsequent to

[date].

Nothing came to my

attention as a result

of applying that

procedure.

Recalculate the number

of blocks of streets

paved during the year

ended [date], shown on

contractors' certicates

of project completion;

compare the resultant

number to the number

in an identied chart of

performance statistics

as of [date].

The number of blocks of

streets paved in the

chart of performance

statistics was Y blocks

more than the number

calculated from the

contractors' certicates

of project completion.

The number of blocks of

streets paved

approximated the

number of blocks

included in the chart of

performance statistics.

Recalculate the rate of

return on a specied

investment (according

to an agreed-upon

formula) and determine

whether the resultant

percentage agrees to

the percentage in an

identied schedule.

No exceptions were

found as a result of

applying the procedure.

The resultant

percentage

approximated the

predetermined

percentage in the

identied schedule.

Inspect the quality

standards classication

codes in identied

performance test

documents for products

produced during

[specied period];

compare such codes to

those shown in the

[identied]computer

printout for [specied

period]asof[date].

All classication codes

inspected in the

identied documents

were the same as those

shown in the computer

printout, except for the

following:

[List all exceptions.]

All classication codes

appeared to comply

with such performance

documents.

Trace all outstanding

checks appearing on a

bank reconciliation as

of [date]tochecks

cleared in the bank

statement of the

subsequent month.

All outstanding checks

appearing on the bank

reconciliation were

traced to the list of

cleared checks in the

subsequent month's

bank statement, except

for the following:

[List all exceptions.]

Nothing came to my

attention as a result of

applying the procedure.

Agreed-Upon Procedures Engagements 2187

Appropriate

Procedures

Appropriate

Description of

Findings

Inappropriate

Description of

Findings

Compare the amounts

of the invoices included

in the "over 90 days"

column shown in an

identied schedule of

aged accounts

receivable of a specic

customer as of [date]to

the amount and invoice

date shown on the

corresponding

outstanding invoice.

Determine whether

the dates on the

corresponding

outstanding invoices

precede the date

indicated on the

schedule by more than

90 days.

All outstanding invoice

amounts agreed with

the amounts shown on

the schedule in the

"over 90 days" column,

and the dates shown

on such outstanding

invoices preceded the

date indicated on the

schedule by more than

90 days.

The outstanding invoice

amounts agreed within

approximation of the

amounts shown on the

schedule in the "over

90 days" column, and

nothingcametoour

attention that the dates

shown on such

outstanding invoices

did not precede the date

indicated on the

schedule by more than

90 days.

Obtain from XYZ

Company [personnel

specied by

management], the

[date] bank

reconciliations. Conrm

with the bank the cash

on deposit as of [date].

Compare the balance

conrmed by the

bank to the amount

shown on the bank

reconciliations.

Obtained from XYZ

Company [personnel

specied by

management], the

[date] bank

reconciliations.

Obtained bank

conrmations of the

cash on deposit as of

[date]. Compared the

balance conrmed by

the bank to the amount

shown on the bank

reconciliations.

[List all exceptions.]

No exceptions were

identied in the

conrmations received,

and nothing came to

our attention as a

result of applying the

procedures.

.A42 When a procedure is written in sufcient detail, the nding may be

very brief because the practitioner does not need to repeat the procedure in

describing the result. When there are no exceptions, common descriptions of

results are the following:

•

No exceptions were noted.

•

No exceptions were [noted/found/identied] as a result of apply-

ing the procedure.

It is acceptable to repeat part of the procedure in the nding, such as in the

following examples:

•

No shipment dates shown on the sample of shipping documents

were subsequent to [date].

•

All outstanding invoice numbers, dates, and amounts agreed with

the corresponding elds on the "over 90 days" column of the

schedule.

2188 Level of Service

If the practitioner identies exceptions in applying the procedures, the report

states them and provides some detail about the item or items involved, such as

in the following examples:

•

We found 14 out of the 15 items to be in agreement; the address on

one item on the schedule did not agree to the [source document].

•

The amount recalculated as a result of performing the procedure

was $XXX, which did not agree with the amount of $YYYY on the

[describe supporting document].

•

Of the 30 selections made, two [insert attribute, such as amounts,

dates, names] did not agree from the [describe the supporting doc-

umentation]tothe[describe the supporting documentation].

A nding written to appear to be a fact or a conclusion would not be appropriate,

such as in the following examples:

•

A result stating, "We determined the current ratio of X Company

at December 31, 20X4, was 2:1," could be considered a fact and

is not appropriate. An appropriate description of the result could

be stated as, "We recalculated the current ratio of X Company at

December 31, 20X4, as 2:1."

•

A result stating, "We have [observed/found/determined] the net

sales of X Company for the year 20X4 were $X," could be consid-

ered a fact and is not appropriate. An appropriate description of

the result could be stated as, "We recalculated the net sales of X

Company for the year 20X4 based on totaling the list of invoices

in the sales journal as $X."

Additionally, terms that might be construed as communicating assurance —

such as reasonable or adequate, or that the results of applying the procedure

were close enough — would not be appropriate. For example, it is inappropriate

to state the following:

•

The [number of blocks of streets paved]perthe[supporting docu-

mentation] approximated the [number of blocks of streets paved]

included in the chart of performance statistics for the year ended

[date].

•

All [classication codes] appear to comply with the requirements

in the contract.

Terms such as minor, immaterial, material,orsignicant, unless the mea-

sures of relevance comprehended by such terms are clearly dened in both

the engagement letter and the practitioner's report, are not appropriate for

use in expressing results of procedures. It is also inappropriate to word a nd-

ing to convey negative assurance. For example, it is inappropriate to state the

following:

•

Nothing came to our attention as a result of applying the proce-

dure.

•

Nothing came to our attention that caused us to believe that [the

subject matter] is not presented in accordance with [the criteria].

Written Representations (Ref: par. .27)

.A43 Written conrmation of oral representations reduces the possibil-

ity of misunderstandings between the practitioner and the engaging party.

The person from whom the practitioner requests written representations is or-

dinarily a member of senior management or those charged with governance

Agreed-Upon Procedures Engagements 2189

depending on, for example, the management and governance structure of the

engaging party, which may vary by entity, reecting inuences such as size and

ownership characteristics.

Requested Written Representations Not Provided or

Not Reliable (Ref: par. .30c)

.A44 Circumstances in which the practitioner may be unable to obtain re-

quested written representations include, for example, when

•

the engaging party does not have a relationship with the respon-

sible party, and

•

the agreed-upon procedures engagement is undertaken against

the wishes of the responsible party, for example, when required

by law or regulation.

In these or similar circumstances, the practitioner may need to reconsider

whether the responsible party is able to take responsibility for the subject

matter.

.A45 Although it is expected that the practitioner will be able to obtain all

the requested written representations from the engaging party and, if applica-

ble, the responsible party pursuant to paragraphs .27–.28, appropriate actions

the practitioner might consider in the circumstances described in paragraph

.30c include the following:

a. Determining the effect on the practitioner's report, including

whether to restrict the use of the practitioner's report or whether

to disclose in the practitioner's report that the engaging party or

the responsible party did not provide one or more of the requested

written representations

b. Withdrawing from the engagement

Preparing the Practitioner’s Report (Ref: par. .25, .31, and .33)

.A46 This section does not require a standardized format for reporting on

all agreed-upon procedures engagements. Instead, it identies the basic ele-

ments that the report is to include. The report is tailored to the specic en-

gagement circumstances. The practitioner may use headings, separate para-

graphs, paragraph numbers, typographical devices (for example, boldface text),

and other mechanisms to enhance the clarity and readability of the report.

.A47 Findings may be misleading, for example, if the responsible party

revises the subject matter as a result of initial ndings from procedures per-

formed, and the ndings to be expressed in the report do not indicate that the

subject matter was changed. In such instances, the ndings may indicate that

the subject matter was revised as a result of initial ndings from the procedures

performed and that there are no ndings with respect to the revised subject

matter.

.A48 Appropriate actions that the practitioner might consider in the cir-

cumstances described in paragraph .33 include

a. performing revised procedures,

b. rewording a procedure or a nding, or

c. withdrawing from the engagement.

2190 Level of Service

Content of the Practitioner’s Agreed-Upon Procedures Report

Title (Ref: par. .34a)

.A49 A title indicating that the practitioner's report is the report of an in-

dependent practitioner (for example, "Independent Practitioner's Report," "Re-

port of Independent Certied Public Accountant," or "Independent Accoun-

tant's Report") afrms that the practitioner has met all the relevant ethical

requirements regarding independence and, therefore, distinguishes the inde-

pendent practitioner's report from reports issued by others.

Identiﬁcation of the Subject Matter to Which the Procedures Have Been

Applied (Ref: par. .34d)

.A50 In identifying the subject matter to which the procedures have been

applied, the practitioner may describe the criteria or measurement framework

used by the responsible party to develop the subject matter. For example, the

identication of the subject matter may be "the cash and accounts receivable of

XYZ Company as of December 31, 20XX in accordance with accounting princi-

ples generally accepted in the United States of America." Including additional

information in the practitioner's report, particularly a general-use report, about

the criteria or measurement framework used by the responsible party to de-

velop the subject matter may assist users in determining whether the proce-

dures are appropriate for their purposes.

.A51 A practitioner may be asked to apply procedures to more than one

subject matter. In these engagements, the practitioner may issue one practi-

tioner's report that refers to all subject matter covered. Section 315 contains

an example of language that may be used in the introductory paragraph to

address such circumstances.

Identiﬁcation of the Responsible Party (Ref: par. .34e)

.A52 The following is an example of a statement that the practitioner may

include in the practitioner's report when the engaging party is not the respon-

sible party, and identication of the responsible party and its responsibility for

the subject matter is based solely on representations received from the engag-

ing party: "In performing our agreed-upon procedures engagement, we have

relied solely on representations provided by [the engaging party]relatingto

the responsible party and its responsibility for [the subject matter]."

Agreement to and Acknowledgment of the Appropriateness of

the Procedures (Ref: par. 34f)

.A53 Although not required, the practitioner may consider adding one or

more of the following statements to address the risk that a user (particularly

of a general-use agreed-upon procedures report) may inappropriately conclude

that parties in addition to the engaging party agreed to and acknowledged the

appropriateness of the procedures:

•

A statement that no other party acknowledged the appropriate-

ness of the procedures

•

An identication of any other parties who agreed to and acknowl-

edged the appropriateness of the procedures for their purposes

and a statement that these parties have acknowledged that the

procedures performed are appropriate for their purposes

Paragraph .A32 of section 315, Compliance Attestation.

Agreed-Upon Procedures Engagements 2191

•

A statement that the procedures are specied in a contract, law, or

regulation and a reference to the contract, law, or regulation that

clearly indicates that additional parties are parties to the contract,

law, or regulation

.A54 Although not required, the practitioner may make an explicit state-

ment that the practitioner makes no representation regarding the appropriate-

ness of the procedures either for the purpose for which the practitioner's report

has been requested or for any other purpose. The practitioner might make this

statement to address the risk that a user may conclude that the practitioner

represents that the procedures performed are appropriate for the intended pur-

pose of the engagement or for any other purpose.

Description of the Intended Purpose of the Agreed-Upon Procedures

Engagement (Ref: par. 34g)

.A55 Because the practitioner is precluded from expressing an opinion or

conclusion, it would not be appropriate to state that the intended purpose of the

engagement was to determine whether the subject matter was prepared or is

stated in accordance with specied criteria or that the practitioner performed

the engagement to conclude whether the entity complied with specied criteria.

Practitioner’s Report Not Suitable for Any Other Purpose (Ref: par. .34h)

.A56 The practitioner may advise users regarding inappropriate uses of

the practitioner's agreed-upon procedures report. For example, the practitioner

may advise that the report is not intended for making investment decisions or

for use by potential lenders or investors.

Statement When the Subject Matter Consists of Elements, Accounts, or Items

of a Financial Statement (Ref: par. .34o)

.A57 If the subject matter consists of elements, accounts, or items of a -

nancial statement, the practitioner's report might, instead, state that the pro-

cedures do not constitute an audit (or a review) of nancial statements or any

part thereof, the objective of which is the expression of an opinion (or conclu-

sion) on the nancial statements or a part thereof.

Relevant Ethical Requirements (Ref: par. .34r)

.A58 Relevant ethical requirements consist of the AICPA Code of Profes-

sional Conduct together with rules of state boards of accountancy and appli-

cable regulatory agencies that are more restrictive. When the Code of Profes-

sional Conduct applies, the practitioner's other ethical responsibilities relate to

the "Principles of Professional Conduct" (ET sec. 0.300).

.A59 Relevant ethical requirements may exist in several different sources,

such as ethical codes and additional rules and requirements within law and

regulation. When independence and other relevant ethical requirements are

contained in a limited number of sources, the practitioner may choose to name

the relevant sources (for example, the name of the code, rule, or applicable reg-

ulation, or Government Auditing Standards promulgated by the Comptroller

General of the United States) or refer to a term that appropriately describes

those sources.

Reservations or Restrictions Concerning Procedures or Findings

(Ref: par. .34t)

.A60 Examples of reservations or restrictions procedures or ndings may

include the following:

2192 Level of Service

•

Disclosure of stipulated facts, assumptions, or interpretations (in-

cluding the source thereof) used in the application of procedures

•

Description of the condition of records, controls, or data to which

the procedures were applied

•

Explanation that the practitioner has no responsibility to update

the practitioner's report

•

Explanation that the sample may not be representative of the pop-

ulation

Signature of the Practitioner (Ref: par. 34u)

.A61 In some cases, law or regulation may allow for the use of electronic

signatures in the practitioner's report.

.A62 In certain situations, the practitioner's report may be required by law

or regulation to include the personal name and signature of the practitioner, in

addition to the practitioner's rm.

.A63 Considerations Specic to Governmental Entities. This section would

not preclude a governmental practitioner from including the personal name

and signature of the practitioner in the practitioner's report when, in certain

situations, the governmental practitioner is required by law or regulation or

chooses to do so.

Practitioner’s Address (Ref: par. .34v)

.A64 In the United States, the location of the issuing ofce is the city and

state. In another country, it may be the city and country. The city and state

where the practitioner practices may be indicated on letterhead that contains

the issuing ofce's location.

Alert That Restricts the Use of the Practitioner’s Agreed-Upon

Procedures Report (Ref: par. .35–.36)

.A65 Based on the circumstances of the engagement, the practitioner may

consider it appropriate to include an alert, in a separate paragraph, that re-

stricts the use of the practitioner's agreed-upon procedures report. Examples

of situations in which the practitioner, using professional judgment, may de-

cide to include an alert, in a separate paragraph, that restricts the use of the

practitioner's agreed-upon procedures report include the following:

•

When the engaging party requests that the use of the report be

restricted.

•

When agreed-upon procedures are performed on compliance with

aspects of contractual agreements, the practitioner may deter-

mine to restrict the use of the report to the parties to the contract

or agreement.

•

When agreed-upon procedures are performed to comply with reg-

ulatory requirements, the practitioner may determine to restrict

the use of the report to the engaging party and the regulator.

•

When agreed-upon procedures are performed relating to certain

subject matter (for example, subject matter addressed in the AT-

C section 300 series), the practitioner may determine to restrict

the use of the report to parties that are known to understand the

subject matter.

Agreed-Upon Procedures Engagements 2193

•

When agreed-upon procedures are performed on subject matter

that is intended to be used by or is only available to a limited

number of parties, the practitioner may determine to restrict the

use of the report to such parties.

•

When the procedures that the practitioner is engaged to perform

are prescribed and the practitioner does not have the ability to

perform or design additional procedures, the practitioner may de-

termine to restrict the use of the report to those parties that pre-

scribed the procedures.

.A66 A practitioner's report that includes an alert that restricts the use of

the report may be included in a document that also contains a practitioner's

report that is for general use. The inclusion of the separate restricted-use re-

port does not affect the intended use of the general-use report nor does the

inclusion of the general-use report affect the intended use of the restricted-use

report. The restricted-use report remains restricted as to use, and the general-

use report continues to be for general use.

.A67 A practitioner may also issue a single combined practitioner's report

that includes (a) a practitioner's report that includes an alert that restricts

its use and (b) a report that is for general use. If these two types of reports

are clearly differentiated within the combined report, such as through the use

of appropriate headings, the alert that restricts the use of the report may be

limited to the report that includes the alert that restricts its use. In such cir-

cumstances, the use of the general-use report is not affected.

.A68 Law or regulation may require that a practitioner's report be made

available to the public as a matter of public record.

.A69 A practitioner is not responsible for controlling, and cannot control,

distribution of the practitioner's report after its release. The alert that restricts

the use of the practitioner's report is designed to avoid misunderstandings re-

lated to the use of the practitioner's report, particularly if the practitioner's

report is taken out of the context in which the practitioner's report is intended

to be used. A practitioner may consider informing the engaging party or other

specied parties that the practitioner's report is not intended for distribution to

parties other than those specied in the practitioner's report. The practitioner

may, in connection with establishing the terms of the engagement, reach an un-

derstanding with the engaging party that the intended use of the practitioner's

report will be restricted and may obtain the engaging party's agreement that

the engaging party and specied parties will not distribute such practitioner's

report to parties other than those identied therein.

.A70 The practitioner may identify the specied parties by naming them,

referring to a list of those parties, or identifying the class of parties, for example,

"all customers of XYZ Company during some or all of the period January 1,

20XX, to December 31, 20XX." The method of identifying the specied parties

is determined by the practitioner.

Adding Other Speciﬁed Parties After the Release of

the Practitioner’s Report (Ref: par. .37)

.A71 When the practitioner is requested to add an additional specied

party, the practitioner may agree to add the additional specied party based

on the practitioner's consideration of factors such as the identity of the other

parties and the intended use of the practitioner's report. The practitioner is

not required to reissue the report to identify the additional specied party in

the alert that restricts the use of the report, or if applicable, indicate that the

2194 Level of Service

additional specied party agreed to the procedures and acknowledged that the

procedures performed are appropriate for their purposes. If the practitioner's

report is reissued, the practitioner is not required to change the date of the

report.

Knowledge of Matters Outside Procedures (Ref: par. .40)

.A72 For example, if, during the course of applying procedures regarding

an entity's internal control, the practitioner becomes aware of a material weak-

ness by means other than performance of the procedures, such matter may be

included in the practitioner's report.

.A73 When the practitioner applies procedures to an element, account, or

item of a nancial statement and has performed an audit or review of the en-

tity's related nancial statements, and the practitioner's audit or review report

on such nancial statements includes a departure from the standard report, the

practitioner may include a reference to the audit or review report and the de-

parture from the standard report in the practitioner's agreed-upon procedures

report.

Communication Responsibilities (Ref: par. .41)

.A74 Disclosure of condential information as dened in the Code of Pro-

fessional Conduct requires the explicit consent of the engaging party or the

responsible party, as appropriate. In circumstances in which such matters are

identied, the practitioner may consider discussing with legal counsel or others

prior to communicating or taking further action.

Documentation (Ref: par. .42)

.A75 Documentation prepared at the time work is performed or shortly

thereafter is likely to be more accurate than documentation prepared at a much

later time.

.A76 The practitioner need not include in the engagement le superseded

drafts of working papers, notes that reect incomplete or preliminary thinking,

previous copies of documents corrected for typographical or other errors, and

duplicates of documents.

Agreed-Upon Procedures Engagements 2195

.A77

Exhibit — Illustrative Practitioner’s Agreed-Upon

Procedures Reports

The illustrative practitioner's agreed-upon procedures reports in this exhibit

meet the applicable reporting requirements in paragraphs .34–.37. A practi-

tioner may use alternative language in drafting an agreed-upon procedures

report, provided that the language meets the applicable requirements in para-

graphs .34–.37.

Example 1: Practitioner’s Agreed-Upon Procedures Report Related to a

Statement of Investment Performance Statistics

Circumstances include the following:

•

The engaging party is the responsible party.

•

The practitioner has assisted in the development of the proce-

dures.

•

No party other than the engaging party has agreed to the proce-

dures and acknowledged that the procedures are appropriate for

their purposes.

Independent Accountant's Report

[Appropriate Addressee]

We have performed the procedures enumerated below on [identify the subject

matter, for example, the accompanying Statement of Investment Performance

Statistics of XYZ Fund for the year ended December 31, 20X1]. [The responsible

party, for example, XYZ Fund] is responsible for [the subject matter].

[The engaging party, for example, XYZ Fund] has agreed to and acknowledged

that the procedures performed are appropriate to meet the intended purpose

of [identify the intended purpose of the engagement, for example, assisting users

in understanding the Statement of Investment Performance Statistics of XYZ

Fund for the year ended December 31, 20X1]. This report may not be suitable

for any other purpose. The procedures performed may not address all the items

of interest to a user of this report and may not meet the needs of all users

of this report and, as such, users are responsible for determining whether the

procedures performed are appropriate for their purposes.

The procedures and the associated ndings are as follows:

[Include paragraphs to describe the procedures performed detailing the nature

and extent, and if applicable, the timing, of each procedure and to describe the

ndings from each procedure performed, including sufcient details on excep-

tions found.]

We were engaged by [the engaging party, for example, XYZ Fund]toperform

this agreed-upon procedures engagement and conducted our engagement in

accordance with attestation standards established by the AICPA. We were not

engaged to and did not conduct an examination or review engagement, the ob-

jective of which would be the expression of an opinion or conclusion, respec-

tively, on [identify the subject matter, for example, the accompanying Statement

of Investment Performance Statistics of XYZ Fund for the year ended December

31, 20X1]. Accordingly, we do not express such an opinion or conclusion. Had

we performed additional procedures, other matters might have come to our at-

tention that would have been reported to you.

2196 Level of Service

We are required to be independent of XYZ Fund and to meet our other ethical

responsibilities, in accordance with the relevant ethical requirements related

to our agreed-upon procedures engagement.

[Additional paragraphs may be added to describe other matters.]

[Signature of the practitioner's rm]

[City and state where the practitioner's report is issued]

[Date of the practitioner's report]

Example 2: Practitioner’s Agreed-Upon Procedures Report Related to Cash and

Accounts Receivable

Circumstances include the following:

•

The engaging party is not the responsible party.

•

Other than the engaging party, no other party has agreed to the

procedures and acknowledged that the procedures are appropriate

for their purposes.

Independent Accountant's Report

[Appropriate Addressee]

We have performed the procedures enumerated below on [identify the subject

matter, for example, the cash and accounts receivable of XYZ Company as of

December 31, 20XX, included in the accompanying information provided to us

by management of XYZ Company]. [The responsible party, for example, XYZ

Company] is responsible for [the subject matter].

[The engaging party, for example, ABC Company] has agreed to and acknowl-

edged that the procedures performed are appropriate to meet the intended pur-

pose of [identify the intended purpose of the engagement, for example, assisting

users in understanding cash and accounts receivable of XYZ Company as of De-

cember 31, 20XX, included in the accompanying information provided to us by

management of ABC Company]. This report may not be suitable for any other

purpose. The procedures performed may not address all the items of interest

to a user of this report and may not meet the needs of all users of this report

and, as such, users are responsible for determining whether the procedures

performed are appropriate for their purposes.

The procedures and the associated ndings are as follows:

Cash

1. For the four bank accounts listed below, we obtained from XYZ

Company management

a. the December 31, 20XX, bank reconciliations and

b. the December 31, 20XX, general ledger.

2. We performed the following procedures:

a. Obtained a bank conrmation directly from each bank of

the cash on deposit as of December 31, 20XX

b. Compared the balance conrmed by the bank to the

amount shown on the respective bank reconciliations

c. Mathematically recomputed the bank reconciliations

d. Compared the cash balances per book listed in the recon-

ciliations below to the respective general ledger account

balances

Agreed-Upon Procedures Engagements 2197

Cash December 31, 20XX

Bank

Cash Balance

per Book

DEF National Bank, general ledger account 123 $5,000

LMN State Bank, general ledger account 124 3,776

RST Trust Company regular account, general

ledger account 125

86,912

RST Trust Company payroll account, general

ledger account 126

5,000

$110,688

We found no exceptions as a result of the procedures.

Accounts Receivable

3. We obtained the accounts receivable aged trial balance as of De-

cember 31, 20XX, from XYZ Company (attached as exhibit A).

We mathematically checked that the individual customer account

balance subtotals in the aged trial balance of accounts receivable

agreed to the total accounts receivable per the aged trial balance.

We compared the total accounts receivable per the accounts re-

ceivable aged trial balance to the total accounts receivable per

general ledger account 250.

We found no exceptions as a result of the procedures.

4. We obtained the accounts receivable subsidiary ledger as of De-

cember 31, 20XX, from XYZ Company. We compared the individ-

ual customer account balance subtotals shown in the accounts re-

ceivable aged trial balance (exhibit A) as of December 31, 20XX, to

the balances shown in the accounts receivable subsidiary ledger.

We found no exceptions as a result of the procedures.

5. We selected 50 customer account balances from exhibit A by start-

ing at the 8th item and selecting every 15th item thereafter un-

til 50 were selected. The sample size selected represents 9.8% of

the aggregate amount of the customer account balances. We ob-

tained the corresponding invoices from XYZ Company and traced

the aging (according to invoice dates) for the 50 customer account

balances shown in exhibit A to the details of outstanding invoices

in the accounts receivable subsidiary ledger.

We found no exceptions as a result of the procedures.

6. We mailed conrmations directly to the customers representing

the 150 largest customer account balance subtotals selected from

the accounts receivable aged trial balance, and we received re-

sponses as indicated below. As agreed, any individual differences

in a customer account balance of less than $300 were to be con-

sidered minor, and no further procedures were performed.

Of the 150 customer balances conrmed, we received responses

from 140 customers; 10 customers did not reply.

2198 Level of Service

No exceptions were identied in 120 of the conrmations received.

The differences in the remaining 20 conrmation replies were less

than $300.

For the 10 customers that did not reply, we traced the items con-

stituting the outstanding customer account balance to invoices

and supporting shipping documents.

A summary of the conrmation results according to the respective

aging categories is as follows.

Accounts Receivable December 31, 20XX

Aging Categories

Customer

Account

Balances

Conrmations

Requested

Conrmations

Received

Current $156,000 $76,000 $65,000

Past due:

Less than 1 month 60,000 30,000 19,000

1–3 months 36,000 18,000 10,000

Over 3 months 48,000 48,000 8,000

$300,000 $172,000 $102,000

We were engaged by [the engaging party, for example, ABC Company]toper-

form this agreed-upon procedures engagement and conducted our engagement

in accordance with attestation standards established by the AICPA. We were

not engaged to and did not conduct an examination or review engagement, the

objective of which would be the expression of an opinion or conclusion, respec-

tively, on [identify the subject matter]. Accordingly, we do not express such an

opinion or conclusion. Had we performed additional procedures, other matters

might have come to our attention that would have been reported to you.

We are required to be independent of XYZ Company and to meet our other

ethical responsibilities, in accordance with the relevant ethical requirements

related to our agreed-upon procedures engagement.

[Additional paragraphs may be added to describe other matters.]

[Signature of the practitioner's rm]

[City and state where the practitioner's report is issued]

[Date of the practitioner's report]

Example 3: Practitioner’s Agreed-Upon Procedures Report in C onnection

With Claims of Creditors

Circumstances include the following:

•

The engaging party is the responsible party.

•

The engaging party and one specied party have prescribed the

procedures for the practitioner to perform. The engaging party

and the specied party have both agreed the procedures and

have acknowledged that the procedures are appropriate for the

intended purpose of the engagement and their purposes, respec-

tively.

Agreed-Upon Procedures Engagements 2199

•

The practitioner has determined to disclose in the agreed-upon

procedures report that the specied party has agreed to and ac-

knowledged that the procedures are appropriate for their pur-

poses.

•

The practitioner has determined to restrict the use of the agreed-

upon procedures report to the parties that prescribed the proce-

dures.

Independent Accountant's Report

[Appropriate Addressee]

We have performed the procedures enumerated below on [identify the subject

matter, for example, the claims of creditors of XYZ Company as of May 31, 20XX,

as set forth in the accompanying Schedule A]. [The responsible party, for exam-

ple, XYZ Company] is responsible for [the subject matter].

[The engaging party, for example, XYZ Company] has agreed to and acknowl-

edged that the procedures performed are appropriate to meet the intended pur-

pose of [identify the intended purpose of the engagement, for example, assisting

users in understanding the claims of creditors of XYZ Company as of May 31,

20XX, as set forth in the accompanying Schedule A]. Additionally, [identify the

other party or parties that has or have agreed to and acknowledged that the

procedures performed are appropriate to meet their purposes, for example,

the Trustee of XYZ Company] has agreed to and acknowledged that the pro-

cedures performed are appropriate to meet for their purposes. This report may

not be suitable for any other purpose. The procedures performed may not ad-

dress all the items of interest to a user of this report and may not meet the needs

of all users of this report and, as such, users are responsible for determining

whether the procedures performed are appropriate for their purposes.

The procedures and associated ndings are as follows:

1. Obtained the general ledger and the accounts payable trial bal-

ance as of May 31, 20XX, from XYZ Company. Compared the total

of the accounts payable trial balance to the total accounts payable

balance in general ledger account 450.

The total of the accounts payable trial balance agreed with the to-

tal accounts payable balance in the general ledger account num-

ber 450.

2. Obtained the claim form submitted by creditors in support of

the amounts claimed from XYZ Company. Compared the creditor

name and amounts from the claim form to the respective name

and amounts shown in the accounts payable trial balance ob-

tained in procedure 1. For any differences identied, requested

XYZ Company to provide supporting detail. Compared such iden-

tied differences to the supporting detail provided.

All differences noted are presented in column 3 of Schedule A.

Except for those amounts shown in column 4 of Schedule A, all

such differences were agreed to [describe supporting detail].

3. Using the claim form obtained in procedure 2, compared the name

and amount to invoices, and if applicable, receiving reports, pro-

vided by XYZ Company.

No exceptions were found as a result of this procedure.

We were engaged by [the engaging party, for example, XYZ Company]toper-

form this agreed-upon procedures engagement and conducted our engagement

in accordance with attestation standards established by the AICPA. We were

not engaged to and did not conduct an examination or review engagement, the

2200 Level of Service

objective of which would be the expression of an opinion or conclusion, respec-

tively, on [identify the subject matter, for example, the claims of creditors of XYZ

Company as of May 31, 20XX, as set forth in the accompanying Schedule A]. Ac-

cordingly, we do not express such an opinion or conclusion. Had we performed

additional procedures, other matters might have come to our attention that

would have been reported to you.

We are required to be independent of XYZ Company and to meet our other

ethical responsibilities, in accordance with the relevant ethical requirements

related to our agreed-upon procedures engagement.

This report is intended solely for the information and use of [identify the speci-

ed parties, for example, XYZ Company and the Trustee of XYZ Company], and

is not intended to be, and should not be, used by anyone other than these spec-

ied parties.

[Additional paragraphs may be added to describe other matters.]

[Signature of the practitioner's rm]

[City and state where the practitioner's report is issued]

[Date of the practitioner's report]

Example 4: Practitioner’s Agreed-Upon Procedures Report in Which Procedures

Are Speciﬁed in Regulation

Circumstances include the following:

•

The engaging party has agreed to the procedures and acknowl-

edged that the procedures are appropriate for the intended pur-

pose of the engagement.

•

The procedures are prescribed in regulation.

•

The practitioner has determined to restrict the use of the agreed-

upon procedures report to the engaging party and the regulator.

Independent Accountant's Report

[Appropriate Addressee]

We have performed the procedures enumerated below on [identify the subject

matter, for example, the nancial accounts of the engaging party during the year

ended December 31, 20XX]. [The responsible party] is responsible for [the subject

matter].

[The engaging party] has agreed to and acknowledged that the procedures per-

formed are appropriate to meet the intended purpose of [identify the intended

purpose of the engagement, for example, assisting users in understanding the

nancial accounts of the engaging party during the year ended December 31,

20XX]. This report may not be suitable for any other purpose. The procedures

performed may not address all the items of interest to a user of this report and

may not meet the needs of all users of this report and, as such, users are re-

sponsible for determining whether the procedures performed are appropriate

for their purposes.

The procedures and the associated ndings are as follows:

[Include paragraphs to describe the procedures performed detailing the nature

and extent, and if applicable, the timing, of each procedure and to describe the

ndings from each procedure performed, including sufcient details on excep-

tions found.]

We were engaged by [the engaging party] to perform this agreed-upon proce-

dures engagement and conducted our engagement in accordance with attesta-

tion standards established by the AICPA. We were not engaged to and did not

Agreed-Upon Procedures Engagements 2201

conduct an examination or review engagement, the objective of which would be

the expression of an opinion or conclusion, respectively, on [identify the subject

matter]. Accordingly, we do not express such an opinion or conclusion. Had we

performed additional procedures, other matters might have come to our atten-

tion that would have been reported to you.

We are required to be independent of [the responsible party] and to meet our

other ethical responsibilities, in accordance with the relevant ethical require-

ments related to our agreed-upon procedures engagement.

This report is intended solely for the information and use of [identify the spec-

ied parties, for example, the engaging party and the State of XXX], and is not

intended to be, and should not be, used by anyone other than these specied

parties.

[Additional paragraphs may be added to describe other matters.]

[Signature of the practitioner's rm]

[City and state where the practitioner's report is issued]

[Date of the practitioner's report]